For eight years, Oregon’s economic and policy discussions have largely focused on energy and the environment. As the emphasis on attracting green companies increased, the term “sustainability” graduated from a nebulous word into a widely adopted bedrock business philosophy.

Yet with fewer than two weeks before the Nov. 2 election, Republican gubernatorial candidate Chris Dudley and Democratic challenger John Kitzhaber have focused more on job creation and education reform than environmental proposals.

Both say following a green path could attract more residents and create cutting-edge jobs, but each is wary of relying on sustainability as a primary economic driver.

“We have to be careful about favoring one industry over another,” Dudley said. “Any incentives we offer (to green-sector companies) need to benefit the state as well as the company.”

While Kitzhaber is more receptive to the sustainability movement, he sympathizes with the state’s oldest-line industry.

“We need to become a leader in clean energy production and market our technology to the world, but we shouldn’t do that at the expense of making our wood products sector into a ‘sunset’ industry, not a ‘sunrise’ industry,” he said. “We need a balanced strategy.”

ENERGY

The candidates agree that nurturing the state’s biomass energy producers could bring huge benefits. The term “biomass” refers to burning the state’s abundant forest waste in order to generate electricity.

Dudley said more active management of state forests would mean more sales of forest waste for biomass, thereby increasing state revenue and potentially generating more money for Oregon’s Common School Fund.

If elected, Dudley also wouldn’t shy away from developing more renewable energy forms. He supports the state’s hydroelectric power system because the grid could provide affordable and carbon-free energy. Such systems could provide future state jobs, he added. He also backs more energy development from such sources as wind, wave, solar and geothermal.

At the same time, he argues the state has failed to develop a consistent long-term energy policy. The failure has “resulted in uncertainty for residential and industrial customers as well as energy producers and builders of major energy infrastructure.”

Kitzhaber agreed that the state needs a better-organized plan to meet its multi-tiered energy goals. Oregon leaders hope that 25 percent of the state’s energy usage will come from renewable sources by 2025. Kitzhaber promised to reach out to “intellectual capital” resources who’d help devise ways Oregon can meet the lofty goal.

The former governor espouses weatherization programs that would make homes and businesses more energy efficient. Such programs would keep more money in Oregon. Of the $10 billion residents spend on energy yearly, roughly 85 percent of the money leaves the state, according to Kitzhaber.

“That’s more money than we spend on kindergarten through (university-level) education,” Kitzhaber said. “Each year, we send more energy-related dollars out of state than we spend. Community-state weatherization programs can reduce peoples’ utility bills so they can invest here in Oregon’s economy.”

Kitzhaber also wants to cement Oregon’s reputation as a wave energy mecca by investing more in coastal facilities.

ENVIRONMENT

Oregon’s current leaders want businesses to help reduce the impact from greenhouse gasses by 75 percent, from 1990 levels, by 2050.

To get there, Kitzhaber would:

• Form a regional partnership with Washington and California that benchmarks each state’s progress toward reducing greenhouse gasses.

• Integrate several of the state’s emission reduction efforts into one goal.

• Enlist higher-education partners such as the Oregon Institute of Technology to provide research on photovoltaic power and fuel-cell systems that could shape the state’s climate recommendations.

To pay for it, Kitzhaber would lobby lawmakers for a clean energy financing plan that provides loan guarantees, grants and occasional tax incentives. Local banks and private foundations would manage the clean energy fund.

Dudley is committed to balancing government’s role in protecting the environment. He would appoint new administrators to key positions and commissions who share his views on conservation, sustainable use of natural resources and allowing access to public lands for economic and recreational activities.

Dudley would also focus on Oregon’s land-use laws, a hot-button topic that led to two ballot measure battles in the last six years.

Dudley maintains that state and local governments routinely ignore individual property rights when examining land uses forcing property owners to pay huge legal and engineering bills. Along with modernizing the land-use system, Dudley backs some expansion of urban growth boundaries within the state, thereby giving more flexibility for rural areas to grow.

Dudley further pledged to promote such state sustainability wheelhouse sectors as agriculture, forest products, fishing and seafood and food processing.

He and Kitzhaber would alter Kulongoski’s business energy tax credit program. Dudley would cap the benefit while Kitzhaber would attempt to apply it to more Oregon-specific companies.

Critics charged that the strategy, which offers incentives for investments in renewable energy and energy conservation, has mainly benefited out-of-state companies.

Nonetheless, Kitzhaber believes such programs help promote Oregon as a green-business building state.

He wants to nurture that reputation and market it internationally.

“We have the opportunity to aggressively promote Oregon’s comparative natural advantages in the globally expanding clean economy,” he said. “We can collect talent in our communities to create a resilient and sustainable economy and a healthy environment.”

Executive roundtable

The Business Journal asked readers to submit questions for the major party gubernatorial candidates. The answers were taken from interviews and their position papers. Answers have been condensed.

Trey Maust

CEO, Lewis and Clark Bank

“What leadership capabilities would you offer that cultivate a positive environment for business?”

Chris Dudley: In recent years, too many Oregonians lost confidence in our state as a place to build a business. And our economic development reputation has been tarnished. To reverse this trend I have proposed a package of tax cuts to spur economic confidence, capital formation and competitiveness. I will start by reducing the capital gains tax by 73 percent to encourage investment in businesses. Next, I will offer emerging businesses the option to defer a majority of their income or excise taxes for two years and I will reduce taxes for existing businesses when they invest in a new piece of equipment. Additionally, I will provide tax credits for businesses that hire people on welfare or unemployment and will offer cities and counties an incentive to recruit new businesses by allowing them to keep half the additional state income tax revenue generated from the employees and businesses they recruit.

John Kitzhaber: I have experience attracting business to Oregon. The economy was diversifying and booming in the 1990s with new high-tech industry investing in Oregon. This did not happen by chance. It resulted from a series of intentional decisions based on the recognition that while government doesn’t create jobs, it can help create the climate in which job growth can occur. The repeal of the unitary tax, the reform of Oregon’s workers’ compensation system and the implementation of the strategic investment program were all government actions that I supported. (The programs) created a business friendly environment in Oregon and laid the foundation for the dramatic economic growth Oregon experienced in the 1990s.

Dexter Turner

President and CEO, Optimization Technologies Inc.

“Can you describe three specific policies that can be undertaken to ensure that Oregon businesses become leaders in electric vehicles and infrastructure?”

Chris Dudley: As governor, my top priority will be restoring private sector job growth. I will do everything I can to help Oregon businesses to take advantage of emerging markets, both here and aboard. We need to pave the way for entrepreneurs that are on the cutting edge of new green technologies to help them become the next Nike or Intel.

John Kitzhaber: That’s part of aligning the kinds of tax incentives and deciding what you’d use strategic investment programs and business energy tax credits for. There’s really a robust opportunity for Oregon. We can reduce our carbon footprint from energy generation. Transportation is a real tough nut to crack. We’ve already made a down payment on charging stations. Now that people are interested in the electric car, we need some incentives for battery manufacturers here in Oregon.

UNIQUE IDEA:

Dudley: A federal, state or regional cap and trade system would significantly increase taxes on energy production and consumers and do damage to the economy and job creation. I’d oppose it.

Kitzhaber: I’d pursue the establishment of a National Laboratory in Oregon. This will allow us to better leverage our ingenuity and talent and will further position us to benefit environmentally and economically by playing a key role in the development of other exciting technologies. For example, next phase battery, electric vehicle and fuel cell development has already taken root in Oregon. A national lab would further enhance our opportunities to take advantage of the commercial and emissions reduction potential from these technologies.